Posted 4/1/2024, 10:00:00 AM
FTC: Grocery Firms Use Supply Issues to Expand Margins, Raising Competition Concerns
- FTC report calls out expanding profit margins as a key driver of rising grocery prices, citing increased concentration in the grocery industry
- Grocery retailers expanded margins to over 7% in 2021 from 5.6% in 2015 by leveraging supply chain disruptions and fines
- Researchers argue supply shocks have enabled implicit coordination allowing companies to raise prices across concentrated sectors
- While supply issues have subsided, profit margins across the economy remain at record highs, raising competition concerns
- UN report also found inflation amplified by companies with market power raising markups in highly concentrated markets
